Political parties: Grand National
Party (GNP); Democratic Party (DP), formerly known as United Democratic Party (UDP);
Liberty Forward Party (LFP); New Progressive Party (NPP); Pro-Park Alliance (PPA);
Renewal Korea Party (RKP).

Over the past several decades,
the Republic of Korea has achieved a remarkably high level of economic growth, which
has allowed the country to rise from the rubble of the Korean War into the ranks
of the Organization for Cooperation and Development (OECD). Today, South Korea is
the United States' seventh-largest trading partner and is the 15th-largest economy
in the world.

In recent years, Korea's economy
moved away from the centrally planned, government-directed investment model toward
a more market-oriented one. South Korea bounced back from the 1997-98 Asian financial
crisis with assistance from the International Monetary Fund (IMF), but its recovery
was based largely on extensive financial reforms that restored stability to markets.
These economic reforms, pushed by President Kim Dae-jung, helped Korea return to
growth, with growth rates of 10% in 1999 and 9% in 2000. The slowing global economy
and falling exports slowed growth to 3.3% in 2001, prompting consumer stimulus measures
that led to 7.0% growth in 2002. Consumer over-shopping and rising household debt,
along with external factors, slowed growth to near 3% again in 2003. Economic performance
in 2004 improved to 4.6% due to an increase in exports, and remained at or above
4% in 2005, 2006, and 2007. With the onset of the global financial and economic
crisis in the third quarter of 2008, annual GDP growth slowed to 2.3% in 2009 and
just 0.2% in 2010.

Economists are concerned that
South Korea's economic growth potential has fallen because of a rapidly aging population
and structural problems that are becoming increasingly apparent. Foremost among
these structural concerns are the rigidity of South Korea's labor regulations, the
need for more constructive relations between management and workers, the country's
underdeveloped financial markets, and a general lack of regulatory transparency.
Korean policy makers are increasingly worried about diversion of corporate investment
to China and other lower wage countries, and by Korea's falling foreign direct investment
(FDI). President Lee Myung-bak was elected in December 2007 on a platform that promised
to boost Korea's economic growth rate through deregulation, tax reform, increased
FDI, labor reform, and free trade agreements (FTAs) with major markets. President
Lee’s economic agenda necessarily shifted in the final months of 2008 to dealing
with the global economic crisis. In 2009, the economy responded well to a robust
fiscal stimulus package and low interest rates.

Automobile

economy south
korea geography

The
automobile industry was one of South Korea's major growth and export industries
in the 1980s. By the late 1980s, the capacity of the South Korean motor industry
had increased more than fivefold since 1984; it exceeded 1 million units in 1988.
Total investment in car and car-component manufacturing was over US$3 billion in
1989. Total production (including buses and trucks) for 1988 totaled 1.1 million
units, a 10.6 percent increase over 1987, and grew to an estimated 1.3 million vehicles
(predominantly passenger cars) in 1989. Almost 263,000 passenger cars were produced
in 1985—a figure that grew to approximately 846,000 units in 1989. In 1988 automobile
exports totaled 576,134 units, of which 480,119 units (83.3 percent) were sent to
the United States. Throughout most of the late 1980s, much of the growth of South
Korea's automobile industry was the result of a surge in exports; 1989 exports,
however, declined 28.5 percent from 1988. This decline reflected sluggish car sales
to the United States, especially at the less expensive end of the market, and labor
strife at home. South Korea today has developed into one of world's largest automobile
producers. Hyundai Kia Automotive Group is Korea's largest automaker.

Shipbuilding

During
the 1970s and 1980s, South Korea became a leading producer of ships, including oil
supertankers, and oil-drilling platforms. The country's major shipbuilder was Hyundai,
which built a 1-million-ton capacity drydock at Ulsan in the mid-1970s. Daewoo joined
the shipbuilding industry in 1980 and finished a 1.2-million-ton facility at Okpo
on Geoje Island, south of Busan, in mid-1981. The industry declined in the mid-1980s
because of the oil glut and because of a worldwide recession. There was a sharp
decrease in new orders in the late 1980s; new orders for 1988 totaled 3 million
gross tons valued at US$1.9 billion, decreases from the previous year of 17.8 percent
and 4.4 percent, respectively. These declines were caused by labor unrest, Seoul's
unwillingness to provide financial assistance. However, the South Korean shipping
industry was expected to expand in the early 1990s because older ships in world
fleets needed replacing. South Korea eventually became the world's dominant shipbuilder
with a 50.6% share of the global shipbuilding market as of 2009. Notable Korean
shipbuilders are Hyundai Heavy Industries, Samsung Heavy Industries, Daewoo Shipbuilding
& Marine Engineering, and STX Offshore & Shipbuilding, the world's four
largest shipbuilding companies.

Foreign relations

South Korea joined
the United Nations in August 1991 along with North Korea and is active in most UN
specialized agencies and many international forums. The Republic of Korea has also
hosted major international events such as the 1988 Summer Olympics, the 2002 World
Cup Soccer Tournament (co-hosted with Japan), and the 2002 Second Ministerial Conference
of the Community of Democracies. In 2010, South Korea hosted the R.O.K.-Japan-China
Trilateral Summit as well as the G-20 Seoul Summit.

Economic considerations
have a high priority in Korean foreign policy. The R.O.K. seeks to build on its
economic accomplishments to increase its regional and global role. It is a founding
member of the Asia-Pacific Economic Cooperation (APEC) forum and chaired the organization
in 2005.

The Republic of Korea
maintains diplomatic relations with more than 170 countries and a broad network
of trading relationships. The United States and Korea are allied by the 1953 Mutual
Defense Treaty. Korea and Japan coordinate closely on numerous issues. This includes
consultations with the United States on North Korea policy.

Population

Korea's population is one of
the most ethnically and linguistically homogenous in the world. Except for a small
Chinese community (about 20,000), virtually all Koreans share a common cultural
and linguistic heritage. With 48.6 million people inhabiting an area roughly the
size of Indiana, South Korea has one of the world's highest population densities.
Major population centers are located in the northwest, southeast, and in the plains
south of the Seoul-Incheon area.

Korea has experienced one of
the largest rates of emigration, with ethnic Koreans residing primarily in China
(2.4 million), the United States (2.1 million), Japan (600,000), and the countries
of the former Soviet Union (532,000).

Language

The Korean language is related
to Japanese and Mongolian. Although it differs grammatically from Chinese and does
not use tones, a large number of Chinese cognates exist in Korean. Chinese ideograms
are believed to have been brought into Korea sometime before the second century
BC. The learned class spoke Korean, but read and wrote Chinese. A phonetic writing
system ("hangul") was invented in the 15th century by King Sejong to provide
a writing system for commoners who could not read classical Chinese. Modern Korean
uses hangul almost exclusively with Chinese characters in limited use for word clarification.
Approximately 1,300 Chinese characters are used in modern Korean. English is taught
as a second language in most primary and secondary schools. Chinese and Japanese
are also widely taught at secondary schools.

Government and political conditions

The Republic of Korea (commonly
known as "South Korea") is a republic with powers nominally shared among
the presidency, the legislature, and the judiciary, but traditionally dominated
by the president. The president is chief of state and is elected for a single term
of 5 years. The 299 members of the unicameral National Assembly are elected to 4-year
terms; elections for the assembly were held on April 9, 2009. South Korea's judicial
system comprises a Supreme Court, appellate courts, and a Constitutional Court.
The judiciary is independent under the constitution. The country has nine provinces
and seven administratively separate cities-the capital of Seoul, along with Busan,
Daegu, Daejeon, Gwangju, Incheon and Ulsan. Political parties include the Grand
National Party (GNP), Democratic Party (DP), Liberty Forward Party (LFP), New Progressive
Party (NPP), Pro-Park Alliance (PPA), and Renewal Korea Party (RKP). Suffrage
is universal at age 19 (lowered from 20 in 2005).

Construction

Construction
has been an important South Korean export industry since the early 1960s and remains
a critical source of foreign currency and "invisible" export earnings.
By 1981 overseas construction projects, most of them in the Middle East, accounted
for 60 percent of the work undertaken by South Korean construction companies. Contracts
that year were valued at US$13.7 billion. In 1988, however, overseas construction
contracts totaled only US$1.6 billion (orders from the Middle East were US$1.2 billion),
a 1 percent increase over the previous year, while new orders for domestic construction
projects totaled US$13.8 billion, an 8.8 percent increase over 1987. The result
was that South Korean construction companies concentrated on the rapidly growing
domestic market in the late 1980s. By 1989 there were signs of a revival of the
overseas construction market—the Dong Ah Construction Company signed a US$5.3 billion
contract with Libya for the second phase of Libya's Great Man-Made River Project,
which, when all five phases were completed, was projected to cost US$27 billion.
South Korean construction companies signed over US$7 billion of overseas contracts
in 1989. Korea's largest construction companies include Samsung C&T Corporation,
who had built noteworthy constructs such as Petronas Towers, Taipei 101, and Burj
Khalifa.